Custom «Gold and Exchange Rates» Essay Paper

For many years among the many chemical elements, people have really liked gold. It has ever been used as money and its price has been increasing. For some of the elements are gases and no one will ever take the risk of putting all his money in a jar that if opened by mistake all of the money will be gone within a second. Lithium unlike gold, when exposed to the air, it causes a very big fire that can burn even the very big concrete walls. Money can not be made to burn in flames that leaving gold as the ideal element. Gold does not react easily and it is loved since no one wants his money to undergo any spontaneous reaction chemically. In the periodic table, many of the elements do react thus making them to be poor choices to be made money that can even be used for exchange rates. Gold will never corrode and therefore it will never fall apart. (Goldstein, J., 2010)

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Of the other elements such as the promethium and einsteinium, are very radioactive and if anybody dares put them in their pockets as money, they won't finish even a year before they are dead. This thus leaves gold as an outstanding element because again it is not radioactive. One can walk with it freely even for years without any effect. For some thing to be money it must be rare. Most of the elements which are not reactive, radioactive and do not cause fire present in the periodic table are very abundant thus not qualifying to be used as money. However still, one should not pick that rare element that is not available often. (Goldstein, J., 2010)

Other than gold there are some other elements which are considered so precious and they include, palladium, rhodium, platinum, silver and gold. Silver reacts though it has been used as money. Elements like palladium and rhodium have just been discovered recently. Of the remaining element, platinum and gold, platinum has a very high melting point of over 3,000 degrees Fahrenheit. Trying to make coins out of this could be very difficult. Gold thus emerges so important for exchange rates. (Goldstein, J., 2010)

Gold is actually the ultimate cash and many tend to resort to it when there is high uncertainty. It is the best because it is scarce, portable, fungible, can be hidden easily and every where in the world it is accepted. (Goldstein, J., 2010)

How the world and the United States would be affected by the economic problems in Ireland.

Even if Ireland got a bail out loan from EU, it could not pay its debts and this affects the word and the United States. Those private investor that lend money to Ireland are going to have to take loses. Stock markets around the world have fallen and some of the large financial institutions have gone down as many of governments bail out their financial systems through creation of rescue packages. (Goldstein, J., 2010)

It is estimated that the livelihood of many people will be affected by this financial crisis. The financial system in the world is so much affected. The US sub-prime mortgage market has collapsed down and the housing boom has reversed in some of the industrialized economies. The trust in these financial system in the world has started to diminish as some of the financial products are now twisted and complex. (Goldstein, J., 2010)

As a result of securitization, banks have started pulling their loans into sellable assets leading to the offloading of risky loans to others. Without knowing it, many banks have put themselves in problems as securitization backfired.

The markets are continuing to suffer from confirmation bias as much belief that they are better than others and can make their own decisions and those decisions are good always. This thus makes them perform poorly as costs become skyrocketing.

Many of the world's financial institutions have collapsed due to the severity of the problem. The remaining institutions have been bought by their competitors as the problem continues. Still due to this severity of the problem, those who are responsible are bailed out. When a bank suffers the crisis, the poor and the rich also suffer because of the roles that banks critically play. Due to the loses banks face, it makes them shore up resolves thus reducing access to credit and making obtaining of the credit very difficult. (Goldstein, J., 2010)

The crisis signals the decline of the US status. It is so evident that its superpowers are shaken by this financial crisis. Financial institutions in Europe have failed and in other industrialized nations, the structural adjustment policies have worsened things as more poverty is created. (Goldstein, J., 2010)

Current exhibit in the Museum of American Finance located on 48 Wall Street, New York, NY 10005.

In the museum, there are rooms and in one of them are series of exhibits displays where rotating selection of permanent collections from museum of American finances are allowed. In them are many fragile and valuable works on paper. All the exhibits combine to show the union of money, power, and its history in a city and a nation.

Stocks, commodities, bonds and artifacts of boom make the largest exhibit. There are intricately fixed financial certificates and teaching ticker tape used to explain the figures and symbols in the stock market. There are also some three multimedia towers showing the New York's nexus of financial power including the New York Mercantile Exchange, New York Stock Exchange and Citigroup's bond trading floor.

Prominent entrepreneurs are featured in interactive oral history made in series. These entrepreneurs include the first woman network television president, founder of USA Networks and founder of jet Blue.

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In the exhibitions are large and rare denominations and pieces that historically were used to purchase. For example there are woven belts made of beads and shells that were used to purchase the island of Manhattan by the Dutch from the native people. Banking is also explained from how people deposit their money to home loans and also this covers the Federal Reserve to the piggy banks.

There is also an exhibition of a room in honor of the architect of the system of the US economy called Alexander Hamilton. Rotating exhibits also do have a gallery made especially for them and also short subject videos are featured.

The current exhibits in the museum of American finance are all geared towards the tracking of the credit crisis. They are looking at the development of the ongoing financial crisis as it is the biggest challenge in the world's economy. This is presented as a monumental graphical wall of 8' x 20' and a video presentation accompany it. It begins with the united state housing bubble through the government injection of many into the private sector. The act of president Obama of the stimulus package was geared towards finding a solution to the financial collapse.